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Wednesday, 17 November 1993
Page: 3008


Senator WATSON (12.38 p.m.) —by leave—I move:

(6)Clause 87, page 63, subclause (1), lines 12 to 21, omit the subclause, substitute:

"(1) For the purposes of this Part, a fund complies with the basic equal representation rules if:

    (a)the fund has a group of 2 or more individual trustees, and:

      (i)the group of trustees consists of equal numbers of employer representatives and member representatives; and

      (ii)at least one of the member representatives is a member of the fund; or

    (b)the fund has a single corporate trustee, and:

      (i)the board of the corporate trustee consists of equal numbers of employer representatives and member representatives; and

      (ii)at least one of the member representatives is a member of the fund.".

(7)Clause 89, page 65, subclause (3), after paragraph (c), add:

  "; and (d)at least one of the member representatives referred to in paragraph (c) must be a member of the fund.".

(8)Clause 90, page 66, subclause (3), after paragraph (c), add:

  "; and (d)at least one of the member representatives referred to in paragraph (c) must be a member of the fund.".

(9)Clause 91, page 67, subclause (3), after paragraph (c), add:

  "; and (d)at least one of the member representatives referred to in paragraph (c) must be a member of the fund.".

I point out that where trustees are other than members of a fund—they could be representatives of the ACTU—this amendment is no reflection on their capabilities. Some of the best performing funds in Australia are those that are run on the basis of trade union-type representatives representing employees. There is no doubt about that, and that is widely recognised. However, as these bills are all about prudential standards, we believe that there is no better auditor of a superannuation fund than a person who is a member of that fund. We are suggesting that at least one member who represents the employees' interests shall be a member of that superannuation fund.

  I think that honourable members will find that in most circumstances that is the case. It makes good sense that there is at least one trustee who is a member, and maybe more. This does not preclude an employee who is a member of the fund from being a trade unionist. These bills are all about safeguards and prudential controls. It should not be forgotten that there are very high standards required of trustees. They can be sued by other members of the fund who believe the trustees have not acted in their best interests. There could be circumstances where the trustees make a decision that does not suit the performance of the fund and that could cause difficulties.

  These amendments provide that at least one of the trustees representing the employees' interests shall be a member of the fund, rather than an outside person. I think this will enhance the prudential standards and controls that operate. The amendment is moved with the highest motive in terms of trying to add another notch or ratchet to the prudential standards or controls that apply to superannuation.